What is address commission and why is it deducted?

Address commission is a percentage of hire the owner pays back to the charterer (or the charterer's in-house broker), historically a return to the charterer for fixing the ship. It reduces the net hire the charterer actually bears, so TCOE deducts it from gross hire.

Why express costs as a per-day figure?

A per-ship-day operating expense lets you compare a time charter directly against a voyage charter or spot fixture on a like-for-like basis. Whatever the cost structure, reducing everything to cost per day shows which employment is cheaper to run.

Are bunkers part of TCOE on a time charter?

Yes. On a time charter the charterer pays for bunkers and port costs while the owner covers crew, maintenance, and insurance through hire. TCOE adds the charterer-borne bunker and port costs to net hire to show the true all-in daily cost.

How is the per-day figure calculated?

Net hire is gross hire times voyage days, less the address commission on that hire. Add total bunkers, port costs, and other expenses to get the all-in voyage cost, then divide by voyage days. The result is the all-in TCOE per ship-day.

Does TCOE include cargo and freight?

No. TCOE is a cost measure only — what it costs to operate the ship per day. Revenue from freight or sub-let hire is compared against TCOE separately to judge whether a fixture is profitable. This tool computes the cost side.

What is the Time Charter Operating Expense (TCOE) Calculator?

Totals time-charter hire, voyage bunker cost, port call costs, and other daily expenses, deducts the broker address commission on hire, and divides by voyage days to give the all-in time-charter operating expense per ship-day. Built for charterers and operators comparing voyage and time-charter economics. It runs free in your browser on Gera Tools, with nothing uploaded.

Time Charter Operating Expense (TCOE) Calculator

Name: Time Charter Operating Expense (TCOE) Calculator
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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To compare a time charter against a voyage or spot fixture you need them on the same basis: cost per ship-day. The time-charter operating expense, or TCOE, reduces hire, bunkers, port costs, and other expenses — net of broker commission — to a single all-in daily figure.

How it works

Gross hire is reduced by the address commission to net hire, then all charterer-borne voyage costs are added and the total is spread over the voyage days:

net_hire_per_day = hire_per_day × (1 − address_commission%)
voyage_net_hire  = net_hire_per_day × voyage_days
total_voyage_cost = voyage_net_hire + bunkers + port_costs + other
tcoe_per_day      = total_voyage_cost / voyage_days

On a time charter the charterer pays bunkers and port costs while hire covers the owner’s crew, maintenance, and insurance, so all of these belong in the all-in daily cost.

Worked example

A bulk carrier hired at 18,000/day with a 3.75% address commission on a 20-day voyage:

Line	Amount
Gross hire per day	18,000
Address commission (3.75%)	−675
Net hire per day	17,325
Voyage net hire (20 days)	346,500
Bunker cost (voyage)	250,000
Port costs (voyage)	40,000
Other expenses	10,000
Total voyage cost	646,500
TCOE per ship-day	32,325

Compare that 32,325/day against the daily freight income the voyage generates to determine whether the fixture covers operating costs and returns a margin.

How TCOE compares with daily operating cost

TCOE includes voyage-variable costs (bunkers, ports) on top of hire. This distinguishes it from:

Daily hire: the gross or net rate in the charter party — excludes voyage costs and gives no picture of true all-in cost.
Operating expense (OPEX): the owner’s fixed daily cost — crew, maintenance, insurance, stores — which the charterer does not directly control on a time charter.
Voyage charter equivalent (TCE): the reverse calculation used by owners to compare voyage gross revenue less voyage costs back to a per-day figure. A charterer’s TCOE and an owner’s TCE are different but related tools for evaluating the same fixture from opposite sides.

Tips for accurate TCOE estimates

Use the actual commission rate and brokerage as stipulated in the charter party; even half a percent difference shifts the TCOE noticeably on long periods.
Bunker quantities should reflect the full voyage including port-idle consumption and ballast legs; under-estimating bunkers is the most common source of TCOE variance.
For multi-port voyages, sum all port cost estimates before entering the total; the tool spreads all costs uniformly across days.
If the fixture earns sub-hire on back-haul or sub-let periods, credit that separately against TCOE rather than mixing revenues into the cost calculation.